Even the quickest review of services provided by MANA to its membership uncovers a veritable menu of offerings that inform, train and educate independent manufacturers’ representatives and their principals concerning the intricacies of effectively working together. High on that list of services are the networking and advocacy efforts of the association that were evident late last year when MANA convened its annual attorney forum and then met with executives of sister representative associations to discuss association trends and best practices.

Association of Manufacturers Representatives Associations (AMRA)

One of the major benefits of MANA and other representative associations continuing their participation in AMRA are the best practice sharing and networking opportunities among association executives. Last year’s meeting was no exception as 12 executives from nine different associations met.

High on the list of concerns that most of the associations are focusing on is the continued member-consolidation activity that results in far fewer potential association members.

If membership remains a concern for associations, the list of concerns that association members report to their association headquarters remains fairly lengthy. As reported during the meeting, included among member concerns are the following:

Included among member concerns are the following:

• How can manufacturers require manufacturers’ representatives to use the principal’s CRM?
• How do manufacturers’ representatives deal with Internet sales?
• The healthcare industry now requires manufacturers’ representatives to be credentialed to call on certain customers (hospitals). Programs are tiered, depending upon where the manufacturers’ representative goes.
• Reduced “effective commission” rates. Even though the commission rate remains the same, the manufacturer requires far more from the manufacturers’ representative than previously. NEMRA is conducting a study by three professors on the impact of commission costs.
• Multi-state commission tracking? (MAFSI created a “SpecPath” video on this subject).
• Top-level executives in larger-sized principal companies fail to understand the value of outsourcing the sales function to manufacturers’ representatives.
• Manufacturers look at manufacturers’ representatives as a cost of doing business rather than an asset.
• Does the manufacturers’ representative business need a new compensation model?

When it came to a discussion of “best practices” that each association can benefit from, among the suggestions made were the possibility of quarterly inserts from member associations in the pages of Agency Sales; commissions offered by MANA for online ads placed on MANA’s online advertising site; and payments made by MANA to member associations when their members (who are not MANA members) register for a MANA seminar.

Associations that participated in the AMRA meeting were: EMDA, ERA, FSMA, HIRA, MAFSI, MANA, MRERF and NEMRA.

MANA Attorney Forum

In what has become an annual event, 25 attorneys met to share their experiences on a number of subjects including conflict of interest, dealing with international manufacturers, valuation of an agency and principal access to agents’ customer list.

Conflict of interest — In a discussion focusing on this subject, it was emphasized that manufacturers’ representatives should always fully disclose their line cards to principals and prospective principals. It was noted that “disclosure” and “consent” are the best defenses to claims of conflict of interest.

International principals — Principals located in Mexico, Europe and China dominated this discussion. Among the points emphasized were:

• Although European countries are European Union members, they all still have their own laws which must be adhered to.
• Chinese manufacturers can have agreements with U.S. manufacturers’ representatives and these same manufacturers can have customers in China who also set up their own agreements with U.S. manufacturers’ representatives, thus creating havoc with the issue of exclusivity.

Valuation of rep firms — It was emphasized that tax planning is critical in order to be sure the arrangement is as tax-efficient as possible. Among the methods of valuation that were discussed were two times the annual commission revenues and the five-year average of commissions.

Who controls the agent’s list of customers? — Two major points emphasized on this subject were these: principals cannot legally ask for customer contracts for the other principals that the manufacturers’ representative represents; if a principal starts asking for customer lists, that’s a preliminary indication the relationship may be on the road to termination.

Attorney Consultation Benefit

An important part of the Forum — which should be of interest to MANA members — was a reiteration of the association’s Attorney Consultation benefit:

One of your benefits as a MANA member is an annual one-half-hour consultation with an attorney known to us as being experienced and knowledgeable about the manufacturers’ agency business and laws that govern rep-principal relationships.

The purpose of this short consultation is to enable you to get a quick answer to a general legal question. It is not intended for you to get specific legal advice or services such as a contract review or even a contract clause review.

The attorney with whom you are speaking will make the decision as to whether the consultation falls under the no-charge member benefit category or under a fee for service category. If the attorney believes the service is one for which you should be invoiced, he should notify you and allow you to make the decision as to whether to proceed or not. Part of this notification would include the hourly rate and an estimate of the amount of time involved. (A list of MANA attorneys may be found on the MANA website: www.MANAonline.org)

In jurisdictions where there are no members of the court, MANA attorneys utilize local counsel to introduce them to the court for purposes of the litigation.

These attorneys are not under any agreement with MANA; each member’s dealings with any of them is on an individual basis, arranged between the member and the attorney he or she selects.

MANA does not guarantee or warrant the services provided by these attorneys or their qualifications. You are responsible for performing your own due diligence before selecting one of them.

MANA reserves the right to add or remove an attorney’s name from the list as it deems appropriate in its sole discretion.

Attorneys in attendance at the Attorney Forum were: John Anderson, Douglas Andrews, Dan Beederman, Matt Benson, Eric Engel, Ray Flores, Randy Gillary, Adam Glazer, Gene Hoff, Jeffrey Human, Thomas Kammerait, Ronald Kirchoff, Barbara Kramer, Mitchell Kramer, Leslie Marell, Greg Murdoch, Gerald Newman, Florentino Ramirez, John Riccione, Jeffrey Robinson, Robert Rogers, Scott Sanders, Mark Smith, Steve Valentine and Victoria Valentine.

MANA welcomes your comments on this article. Write to us at [email protected].